Hey !

TL;DR: An introduction to the 80/20 Principle (one of the core pillars of HRforHumans) and how we can start to apply it to People & Culture with the aim of not just improving the performance, output, engagement (choose your metric) of your People & Culture, but with the aim of multiplying it.

Vilfredo Pareto (1848 – 1923) was an Italian engineer, sociologist, economist and philosopher with an epic name and an equally epic beard; he was also an avid vegetable gardener with a love of peas.

Vilfredo discovered an interesting pattern while studying wealth distribution in Italy: 80% of Italy’s wealth was owned by 20% of the population. When tested, this pattern rang true across multiple economies and time periods… and was further confirmed by Vilfredo's pea pods. 80% of his peas came from 20% of the pods.

Unfortunately for Vilfredo, he was not the most articulate bloke and he struggled to communicate this concept in a meaningful way; instead, composing a series of rambling sociological theories.

Luckily for Vilfredo, a couple of more articulate economists came across similar patterns (1949: “Zipf’s Principle of Least Effort” and 1951: “Juran’s Rule of the Vital Few”) and Pareto finally received the credit that he deserved for discovering the 80/20 Principle (now known as Pareto’s Law).

What is the 80/20 Principle?

It states that a minority (20%) of causes/inputs/effort soften lead to a majority (80%) of the results/outputs/rewards.

The 80/20 Principle has been found to apply in:

·      Business – countless examples of 80% of revenue/profit coming from 20% of clients/products

·      Economics – 80% of wealth is owned by 20% of the people

·      Language – 20% of the words in the English language account for 80% of average daily usage

·      Alcohol – 80% of alcohol is consumed by 20% of consumers

·      Technology – Microsoft found that 80% of Windows crashes were caused by 20% of bugs

·      Daily Life – 80% of the fights with my daughter are caused by 20% of our interactions

It is important to note that 80/20 is not about a specific percentage, rather it has become shorthand for the inbuilt imbalance between effort and reward. Depending on what you’re measuring, it could be 75/25, 90/10 or 99/1.

APPLYING THE 80/20 PRINCIPLE

What should we do with the 80/20 Principle?

If we put aside the fact that Vilfredo couldn’t clearly articulate his Principle and accept that it does impact our companies, our work, our happiness, our effectiveness… and our peas, then there are some actionable steps we, as individuals, should consider following:

• Recognise and celebrate exceptional productivity or results, rather than trying to increase efforts
• Strive for excellence in a few things, rather than good performance in many
• Delegate or outsource as much as possible in order to focus on your “20% tasks”
• Only do the things that we are best at and enjoy most
• Consciously seek out where 20% of effort could lead to an 80% result
• Calm down, work less and focus on the limited number of very valuable goals where the 80/20 rule could work

The implications of this in the workplace are far reaching (marketing, hiring, career progression, customer selection, product focus, pricing etc), but specifically how do we now apply this to the People & Culture in your workplace?

1.    Do a stock take - make a note of all the things that you do to improve the experience of your employees. It might be:

a.    THINGS like free food/drinks, parties, swag, perks, or technology;

b.    POLICIES like generous annual leave or parental leave policies, flexibility, leaving early on Fridays in summer, bringing pets to work;

c.     PROGRAMS like a Wellbeing Program, Diversity & Inclusion Program, Training Programs, Rewards & Recognition program or Employee of the Year programs; Or

d.    PROCESSES like the time and energy you put into Onboarding new hires, something special you do during the Recruitment process or the special way that you manage Performance Development.

2.    Ask your team - Use a survey (or just ask people), of all the things we do to create an awesome culture:

a.     What do value the most? Why?

b.    What do you value the least? Why?

c.     What are the things are part of our DNA?

d.    If you had to get rid of half of these things, what would you get rid of?

3.    Define your 20%

4.    Talk to your employees – Say, “We want to create an amazing culture here at Acme Industries. A culture that you guys love. And a culture that will help us achieve our vision. To do that we want to become strategic about creating our culture, rather than just doing a bit of everything and hoping it all comes together. We will be getting rid of a few things, introducing new things and doubling down on others. As we trial these things, we want to hear your feedback. Here is the plan…”

5.    Implement, trial, collect feedback and iterate.

Future emails will go into more detail about Culture Design, Culture Hacking, Job Design and Performance Development; all of which benefit from 80/20 Thinking.

Takeaway Questions:

• If we had to cut back our People & Culture budget, programs and initiatives by 80%, what could we get rid of?
• How much money/time/resources/stress would this save us?
• How could we then invest that money/time/resources into the 20% (or similar activities) in order to produce an 80% result?

Ask yourself these questions and send me an email to HRforHumans@alionvibes.com with some of the things you came up with. Also, what do you think of the format? Too long? Not enough detail? Needs more gifs? Let me know...

Catch you next week!

Clint